ASYMMETRY® Observations are Mike Shell’s observations of all things asymmetry, asymmetric risk/reward, asymmetric payoffs, and asymmetric investment returns.
Most investment strategies look attractive until you price the cost of not blowing up. Nassim Nicholas Taleb explains why “alpha” built on averages often disappears once real-world survival, drawdowns, and irreversible loss are properly accounted for—an insight that matters deeply for business owners selling their company and transitioning from wealth creation to wealth preservation.
Most portfolios are built on averages and optimization. But markets don’t move on averages—and investors don’t live through drawdowns like a spreadsheet assumes. Under pressure, loss aversion changes decisions in predictable ways: winners get cut too early, losers get held too long, and volatility clusters. The real risk isn’t just market risk. It’s behavioral risk. That’s why we design systematic risk management that defines downside in advance and lets upside trends compound.
“The exit, not the entry, always determines the outcome. The exit determines if you win or lose, and how much you win or lose.” — Mike Shell
The steep contango in the VIX futures curve signals market complacency—but also reveals an asymmetric opportunity. This post explores how volatility suppression breeds fragility, why tail risk is mispriced during calm regimes, and how long-volatility positions can deliver convex payoffs when the curve snaps.
Why Is the Stock Market Down Today? The stock market is trading lower today as a mix of weak economic data, aggressive new tariffs, and stretched valuations shake investor confidence.
S&P 500 dividend yield has fallen to 1.25%, near a 20-year low. Discover what this means for equity risk, valuation, and how Shell Capital structures portfolios for asymmetric returns in today’s high-risk, low-reward environment.
Asymmetric returns aren’t found in undervalued stocks—they’re engineered through structured trades with defined risk and convex upside. Learn how.
Discover how AVWAP analysis reveals selling pressure in the U.S. Dollar Index. Learn why price below anchored volume-weighted averages signals asymmetric risk, underwater positioning, and potential downside continuation—without forecasting.
We pursue what we refer to as "drawdown control" through individual position risk management, portfolio heat limits, and portfolio hedging for risk mitigation.
Investment Drawdowns from Market Losses Work Geometrically Against You Losses don’t scale linearly—they scale exponentially in how they hurt compounding.